Benefits In Kind - A Definition - Finally!
Although “Trivial ” benefits in kind have been free of tax for some time,HMRC have typically been fairly narrow on their definition leaving empoyeers to pay more tax than they had intended.
The good news is from 6 April 2016 there will be a statutory definition of what is a “trivial” benefits, which should be welcomed by many employers and employees and will help them with their tax planning.
HMRC has stated that in order to be treated as “trivial” the benefit must satisfy the following conditions :
- The cost of provision must not be more than £50
- It must not be in the form of cash or a cash voucher
- The employee must not be entitled to the benefit as part of any contractual agreement
- The benefit must not be provided in recognition of any particular service performed by the employee
- In addition, there is a further restriction which only applies to close companies and where the benefit is provided to an individual who is a director or other office holder (or a member of their family or household). In this case, the exemption is capped at a total cost of £300 in a tax year.
Has anyone here had any HMRC issues with benefits in kind tax?
Last edited by torka; 9th March 2016 at 10:38 AM.
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